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The American Journal of Managed Care April 2015
Clinical Provider Perceptions of Proactive Medication Discontinuation
Amy Linsky, MD, MSc; Steven R. Simon, MD, MPH; Thomas B. Marcello, BA; and Barbara Bokhour, PhD
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Rosalind Harper, PhD, RN; Tanya Temkin, MPH; and Reena Bhargava, MD
Redefining and Reaffirming Managed Care for the 21st Century
David Blumenthal, MD, MPP; and David Squires, MA
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Managing Specialty Care in an Era of Heightened Accountability: Emphasizing Quality and Accelerating Savings
John W. Peabody, MD, PhD, DTM&H; Xiaoyan Huang, MD; Riti Shimkhada, PhD; and Meredith Rosenthal, PhD
Persistent High Utilization in a Privately Insured Population
Wenke Hwang, PhD; Michelle LaClair, MPH; Fabian Camacho, MS; and Harold Paz, MD, MS
Self-Efficacy in Insurance Decision Making Among Older Adults
Kathleen Kan, MD; Andrew J. Barnes, PhD; Yaniv Hanoch, PhD; and Alex D. Federman, MD, MPH
Limited Effects of Care Management for High Utilizers on Total Healthcare Costs
Brent C. Williams, MD, MPH
Observation Encounters and Subsequent Nursing Facility Stays
Anita A. Vashi, MD, MPH, MHS; Susannah G. Cafardi, MSW, LCSW, MPH; Christopher A. Powers, PharmD; Joseph S. Ross, MD, MHS; and William H. Shrank, MD, MSHS
Elderly Veterans With Dual Eligibility for VA and Medicare Services: Where Do They Obtain a Colonoscopy?
Ashish Malhotra, MD, MS; Mary Vaughan-Sarrazin, PhD; and Gary E. Rosenthal, MD
Costs of Venous Thromboembolism Associated With Hospitalization for Medical Illness
Kevin P. Cohoon, DO, MSc; Cynthia L. Leibson, PhD; Jeanine E. Ransom, BA; Aneel A. Ashrani, MD, MS; Tanya M. Petterson, MS; Kirsten Hall Long, PhD; Kent R. Bailey, PhD; and John A. Heit, MD
Binary Measures for Associating Medication Adherence and Healthcare Spending
Pamela N. Roberto, MPP; and Eberechukwu Onukwugha, PhD
Functional Status and Readmissions in Unilateral Hip Fractures
Paul Gerrard, MD; Richard Goldstein, PhD; Margaret A. DiVita, PhD; Chloe Slocum, MD; Colleen M. Ryan, MD; Jacqueline Mix, MPH; Paulette Niewczyk, PhD, MPH; Lewis Kazis, ScD; Ross Zafonte, DO; and Jeffrey C. Schneider, MD

Managing Specialty Care in an Era of Heightened Accountability: Emphasizing Quality and Accelerating Savings

John W. Peabody, MD, PhD, DTM&H; Xiaoyan Huang, MD; Riti Shimkhada, PhD; and Meredith Rosenthal, PhD
The authors report on a conceptual "specialty ACO" design in cardiology in which cardiology-specific historic spending targets are created to capture cardiovascular diseaseórelated reimbursement and a quality measurement system is introduced.
Engaging specialists in accountable care organizations (ACOs) may make them more responsive to pressures to lower costs and raise quality. This paper introduces a novel accountable care design in cardiology.

Study Design: Preliminary study using baseline data.

Methods: The Accelerating Clinical Transformation for Creating Value and Controlling Cost in Cardiology concept study involved providers employed by the Providence Medical Group, Oregon. First, using claims data from 2009 through 2011, we created a historic budget to capture cardiovascular disease (CVD)-related costs for attributed patients on a per patient per year basis. Second, we introduced a validated quality metric, the Clinical Performance and Value vignette, to a sample of cardiology providers to examine clinical practice variation in treating coronary heart disease (CHD), coronary heart failure (CHF), and atrial fibrillation (AF). Lastly, we analyzed reimbursement claims paid for CHD, CHF, and AF, and forecasted potential cost savings from reductions in clinical variation.

Results: Examining historic costs, we found they were stable over time, but variable by provider and disease. Quality scores, measured against evidence-based cardiology guidelines, ranged from 48.9% to 85.4% (mean = 66.8%; SD = 5.4%), and the prevalence of unnecessary testing was 46% in CHD, 71% in CHF, and 30% in AF. We project that reducing unnecessary care by 15% to 25% would yield $200,000 to $498,000 in savings ($50-$83 per patient visit) annually. And, if the top 10% of providers as determined by CVD-related costs reduced their costs by 25%, savings would be an additional $283,512 per year.

Conclusions: This accountable care design framework is timely for cardiology and could be applied for other specialty conditions, such as cancer.

Am J Manag Care. 2015;21(4):284-292
Take-Away Points
  • This paper reports on an innovative approach to controlling an important driver of costs: namely, appropriate specialty care utilization within specialty capitated payment arrangements.
  • We introduced a “specialty accountable care organization" (ACO) design concept among cardiology providers employed in a large Pacific Northwest health system in which we used a cardiology-specific subcapitation and potential shared savings design and introduced a quality measurement system.
  • We believe this report will have implications for a large number of ACOs and similar organizations nationwide, and be of interest to readers as a model for how shared accountability for quality and cost across the delivery system can be implemented.
Specialty care accounts for the vast majority of healthcare spending and its use is a major driver of cost over time. The United States spends the most on cardiovascular disease (CVD)—$273 billion in total direct costs in 2010.1 Cardiologists are leaders in adopting evidence-based medicine to improve clinical quality and practice effectiveness, thereby improving clinical outcomes,2 patient satisfaction,3 mortality, and morbidity.4,5 However, despite this impressive, professional society-endorsed evidence base and the equally impressive clinical and economic utility of adhering to the cardiology evidence, a “translational gap” between evidence and practice remains.6,7 Notably, there is widespread practice variation in cardiology that presents an opportunity to improve quality and rein in costs. To improve care and slow cost growth, payers are increasingly turning to using shared savings models, which introduce more aggressive risk-sharing with incentives for quality.8,9 Shared savings involve an ex ante discussion with a payer and agreement on expected spending—usually historically determined—weighed against actual savings with some formula for sharing the difference if there is indeed any savings.10 Shared savings arrangements have been effective at lowering input costs such as drugs, implants, and imaging studies from the standpoint of hospitals and facilities,11,12 yet the overall impact of cost savings to the healthcare system has not been clearly demonstrated.13

Payments based upon a condition and then linked to shared savings for specialists and primary care providers, however, could encourage managing care across place and time so that profitability can be linked to both efficient delivery of services for an acute clinical episode, and a shift in utilization to lower-cost venues such as the clinic or even the home. Ultimately, shared savings may have their greatest impact if they are condition-focused and reduce utilization by limiting exacerbations requiring readmission, diagnostic testing, or recurrent treatment.

It is surprising that although specialists are at the forefront of evidenced-based practice initiatives, along with being important cost centers in merging payment models, they are not the basis for organizing accountable care organizations (ACOs); to date, efforts to control costs and manage care have been centered on primary care practice. However, as the number of complicated patients grows—particularly those with chronic conditions such as CVD who require specialty care and often multi-specialty care—arguably a shift of focus is required to organize care around the patient and condition rather than the provider and the facility. Yet, there are few examples of how specialists can be engaged with physician leadership and share accountability and savings with all other providers caring for a particular condition.

A specialty ACO requires that the risk level and payment for providers be set in a practical and equitable fashion that does not compromise quality. While at the system level a global budget may exist for an ACO, importantly, the responsibility for cost control is not totally borne by individual physicians. The portion of shared savings “at risk” for physicians, and thus the incentive, would ideally be for quality based upon adherence to guidelines describing which best practices are linked to better clinical outcomes.14 An opportunity to test this concept might exist in the treatment of CVD, because currently, more than 60% of US cardiologists are employed or are in negotiation for employment.15

We argue that the receipt of shared savings payments must be conditional upon meeting a series of practice-based quality standards. The challenge has been how to determine (and raise) the quality thresholds. A newer and increasingly adopted method for measuring and improving quality through serial measurement and feedback is the Clinical Performance and Value (CPV) vignette, an open-ended simulated case in which a provider is asked to care for a presenting patient and is then scored based on practice guidelines. CPV vignettes are the basis for qualifying for shared savings for cardiology care reported here.

The Accelerating Clinical Transformation for Creating Value and Controlling Cost in Cardiology (ACT-C3) Project is a novel accountable care design in cardiology, centered on CPV vignettes, in which our aim was to introduce a methodology to determine historic costs and identify areas of savings, all while maintaining a focus on evidence-based quality of care. The design requires a measurement of clinical practice and the establishment of a quality threshold in order to participate in any shared savings.


The Accelerating Clinical Transformation for Creating Value and Controlling Cost in Cardiology (ACT-C3) Project

Sponsored by Providence Health & Services—a nonprofit healthcare system consisting of a network of health plans, 27 nonprofit hospitals, 214 physician clinics, and a broad range of clinical programs and affiliated services—researchers at the University of California (San Francisco) and from the Providence Medical Group formed the Accelerating Clinical Transformation for Creating Value and Controlling Cost in Cardiology (ACT-C3) Project to design a new model for the care of patients with CVD.

The cardiologists, hospitalists, and nurse practitioners in the project were employed by the Providence Medical Group (PMG), the physician organization that centralizes operational infrastructure and promotes clinical best practices. PMG Oregon has the largest cardiovascular medicine group in Portland, with the PMG cardiovascular medicine division employing about 34 cardiovascular physicians and 20 advanced practice providers.

ACT-C3 completed pilot investigations in 2 general areas: business (costs) and clinical (quality). For the examination of costs to the payer, we created a historic budget for CVD care—named “CardioGrouper”—that would be used to determine the total spending threshold for a shared savings agreement between a payer and the medical group; savings would accrue to the whole medical group. Using the Clinical Classification Software (CCS) from the Agency for Healthcare Research & Quality (AHRQ), we pulled specific CVD diagnosis codes and then used patient-level claims data from several plans to capture all CVD-related claims for attributable patients on a per patient per year basis. We examined these data for a 3-year span from 2009 to 2011 (described in Part 1 below).

The clinical activities centered on the CPV vignettes, a measure used to examine quality (described in Part 2 below) by determining correct scores for clinical scenarios based on American College of Cardiology (ACC) guidelines. Our motivation was to make the CPV vignette score the basis for qualifying into the shared savings program via achieving a minimum threshold of quality performance. By incorporating this quality requirement into our design model, we were assuming that an increased use of evidence-based practice standards, as measured by CPV vignette scores, would lead to better outcomes and costs. We then analyzed clinical variation alongside historic spending identified by our CardioGrouper to model potential cost savings opportunities (described in Part 3 below). The ultimate goal of this care design project is to show how these opportunities can lead to new payer-provider contracts, wherein savings would be shared among the purchasers or payers, cardiology providers, and the delivery system.

Part 1: Establishing the historic budget—looking at reimbursement over time to establish a spending target for the CVD service line. Costs incurred to payers as claims paid were determined specifically for CVD on a per patient per year basis—we called this the CardioGrouper. We defined “attributable patients” as adult patients seen in the Portland service area with unique member identification for Providence Health Plan. Patients were stratified into those with and without a CVD diagnosis using the list of CVD-specific diagnosis codes from AHRQ CCS developed by the Healthcare Cost and Utilization Project for International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM), CCS-7 (diseases of the circulatory system, excluding 7.5; diseases of veins and lymphatics). Patients thus identified were then stratified into low versus high risk, defined by whether the patient had been seen by a cardiologist with a new visit code during the claims year. We defined risk this way because a visit to a cardiologist for cardiovascular disease is a reasonable threshold for signaling that additional expert care was required.

We determined the historic budget (ie, historic reimbursed charges) by taking all attributed patients and aggregating all their CVD-related patient-level claims paid. To capture the total service line claims paid for each attributed patient, we took common CVD procedural lists from existing cardiology practice groups and reconciled them against CCS Services and Procedural categories relevant to CVD (13,820 Current Procedural Terminology codes in total, used to identify the patients). To capture CVD-specific inpatient claims paid, we used a select list of 59 Major Diagnostic Category 5, cardiology-specific diagnostic-related groups. In total, all CVD-related claims associated with inpatient facility, outpatient procedure, or professional services were included. Using 2011 Providence Medicare Advantage plan data, we then analyzed the CVD cost—defined as the claims paid to the provider—for patients with all CVD diagnoses and by disease for our 3 target clinical conditions: 1) coronary heart disease (CHD), 2) coronary heart failure (CHF), and 3) paroxysmal atrial fibrillation (AF).

We analyzed the cost to the payer (claims paid) by condition for the 2 main cardiology groups employed by the Providence Medical Group, which we refer to as Group A and Group B (the groups are comparable in number of clinical staff, patient load, and referral base), to ascertain if the costs were stable over time. In addition, we stratified claims paid by patient risk, where low risk is defined as having had no new cardiology visit in the year of analysis, and high risk as having had a cardiology new-patient visit in that year. We further examined test utilization by looking at the number of cardiovascular tests per patient per year. We compared utilization (15 different CVD tests) between Groups A and B for our 3 different target conditions. We used a Bonferroni approach to adjust for multiple testing and established a significance level of P <.0001.

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